China auto show forg­ing ahead un­der anti-virus con­trols

First ma­jor in-per­son sales event since pan­demic be­gan

Arab Times - - BUSINESS -

BEI­JING, Sept 24, (AP): The first event for the CEO of Swedish elec­tric car brand Polestar at this month’s Bei­jing auto show: A two-week quar­an­tine in a ho­tel.

The auto show, the first ma­jor in­per­son sales event for any in­dus­try since the coro­n­avirus pan­demic be­gan, opens Satur­day in a sign the rul­ing Com­mu­nist Party is con­fi­dent China has con­tained the disease. Still, au­tomak­ers face in­ten­sive anti-virus con­trols in­clud­ing quar­an­tines for vis­i­tors from abroad and curbs on crowd sizes at an event that usu­ally is packed shoul­der-to-shoul­der with spec­ta­tors.

“The car show will in­deed be dif­fer­ent from any other car show,” said Thomas In­gen­lath of Polestar, owned by China’s Geely Hold­ing, by phone from his ho­tel room in Tian­jin, east of Bei­jing.

The au­tomak­ers’ will­ing­ness to tackle the show’s lo­gis­ti­cal chal­lenges high­lights the im­por­tance of China, their big­gest mar­ket. Chi­nese sales have re­bounded to pre-pan­demic lev­els while US and Euro­pean de­mand is weak and the in­dus­try strug­gles to re­verse multi­bil­lion-dol­lar losses.

“China is the only hope for many global car mak­ers,” said John Zeng of LMC Au­to­mo­tive Con­sult­ing. “They are re­ally count­ing on China to help their bot­tom line.”

Ford Mo­tor Co, Gen­eral Mo­tors Co, BMW AG and other brands are go­ing ahead with global and China de­buts of elec­tric SUVs, lux­ury coupes and fu­tur­is­tic con­cept cars. Some are broad­cast­ing events on­line to reach wider au­di­ences.

CEO Makoto Uchida of Nis­san Mo­tor Co and other ex­ec­u­tives plan to ap­pear by video from their home coun­tries. Most brands are re­ly­ing on Chi­nese em­ploy­ees or for­eign man­agers who work in the coun­try full-time to op­er­ate their dis­plays while keep­ing con­tact with spec­ta­tors to a min­i­mum. China’s auto in­dus­try has largely re­cov­ered since the rul­ing party de­clared vic­tory over the disease in March and al­lowed fac­to­ries and deal­er­ships to re­open.

In Au­gust, sales rose 6% over a year ear­lier. Mean­while, pur­chases in the United States were down 9.5% from pre-pan­demic lev­els. Sales in Europe plunged 17.6%.

Au­tomak­ers are re­spond­ing by slash­ing work­forces and shrink­ing op­er­a­tions.

Nis­san is clos­ing fac­to­ries in Spain and In­done­sia and cut­ting global pro­duc­tion by 20% af­ter re­port­ing a $6.2 bil­lion loss for the year end­ing in March. Groupe Re­nault SA is cut­ting 15,000

jobs world­wide and in April pulled out of its China joint ven­ture with sta­te­owned Dongfeng Mo­tor Co.

To cut costs, Fiat Chrysler Au­to­mo­biles NV and PSA Peu­geot Citroen want to merge and cre­ate the world’s fourth-big­gest au­tomaker. But they face an in­ves­ti­ga­tion by Euro­pean reg­u­la­tors into whether that will im­prop­erly re­duce com­pe­ti­tion.

In China, the pan­demic ac­cel­er­ated the con­sol­i­da­tion of a frag­mented in­dus­try with dozens of com­peti­tors by forc­ing a string of smaller lo­cal brands out of the mar­ket and big­ger com­pa­nies into al­liances, said Zeng.

“That will change the in­dus­try land­scape in the long run,” he said.

China’s ma­jor auto shows, held in Bei­jing and Shang­hai in al­ter­nate years, are the in­dus­try’s big­gest events, at­tract­ing ev­ery global au­tomaker and dozens of new but am­bi­tious Chi­nese brands.

The last Bei­jing auto show in 2018 had 1,200 ex­hibitors from 14 coun­tries and 820,000 vis­i­tors, ac­cord­ing to or­ga­niz­ers. This month’s event, post­poned from March, fol­lows a smaller auto show

in July in the west­ern city of Chengdu with 120 ex­hibitors that was a trial run for anti-virus mea­sures.

The Bei­jing city gov­ern­ment has told au­tomak­ers to limit the num­ber of guests they in­vite but has yet to say how many peo­ple will be al­lowed into the 200,000-square-me­ter (2.2 mil­lion­square-foot) ex­hi­bi­tion cen­ter. Rules is­sued by the city say ev­ery­one at the show should re­main at least 1 me­ter (three feet) from each other. Zeng, the in­dus­try an­a­lyst, said he was skip­ping the auto show be­cause if leaves his home in Shang­hai, his chil­dren would have to be quar­an­tined af­ter his re­turn.

Polestar’s In­gen­lath was tested for the coro­n­avirus be­fore be­ing al­lowed to board a plane in Stock­holm. He had a sec­ond test af­ter land­ing Sept 5 in Tian­jin, one of sev­eral cities where vis­i­tors from abroad un­dergo quar­an­tine be­fore they are al­lowed to travel to Bei­jing, the Chi­nese cap­i­tal.

“Re­ally, to get emo­tion and the pas­sion about the brand across, you can’t do that even with all the mod­ern me­dia we have,” In­gen­lath said. “So I de­cided to

go for a month.”

Polestar, spun off from Swe­den’s Volvo Cars in 2017 as a stand­alone brand, is one of dozens of pro­duc­ers that plan to dis­play elec­tric ve­hi­cles. They range from es­tab­lished global giants to in­de­pen­dent Chi­nese com­peti­tors in­clud­ing BYD Auto Co and NIO.

The Com­mu­nist Party wants to make China a leader in the tech­nol­ogy and has used sub­si­dies and other sup­port to trans­form it into the big­gest EV mar­ket, ac­count­ing for about half of global sales. To spur com­pe­ti­tion, Bei­jing ended re­stric­tions on for­eign own­er­ship of elec­tric ve­hi­cle pro­duc­ers in 2018.

In­gen­lath said he brought books but has had lit­tle time to read in be­tween work­ing on­line and deal­ing with co­work­ers by phone, email and on­line video.

“I have been go­ing through pretty hard nor­mal work rou­tine,” he said.

In­gen­lath’s 13-year-old daugh­ter in­ter­viewed him for a class­room pre­sen­ta­tion about his quar­an­tine. Barred from leav­ing his room, he set aside two hours a day to lift weights and do cal­is­then­ics “just to be able not to go crazy.”

Work­ers prepare for the up­com­ing Auto China 2020 show in Bei­jing on Sept 24, 2020. Auto ex­ec­u­tives are fly­ing in early to wait out a coro­n­avirus quar­an­tine ahead of the Bei­jing auto show, the year’s big­gest sales event for a global in­dus­try that is strug­gling with tum­bling sales and lay­offs. (AP)

Newspapers in English

Newspapers from Kuwait

© PressReader. All rights reserved.